Samuel Gacheha Chege v Kenya Women Microfinance Bank [2021] KEELRC 1803 (KLR)
The bottom line
#A Kenyan court refused to rewrite a former bank employee's staff mortgage deal, ruling the bank lawfully kept his dues as loan security under their contract.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the application has merits
Key legal issues
#Whether the Claimant was entitled to repay his mortgage at preferential staff rates and to have his undisputed terminal dues of Kshs. 1,032,626.84 released pending the suit
The application was dismissed; the Respondent lawfully exercised its right of set-off and the Claimant was not entitled to the orders sought
Clause 5(ii) of the HR Policy Manual entitled staff with above 15 years' service to preferential terms until loan maturity, and the Claimant had 16 years' service. However, Clause 5(i) entitled the Respondent to set off amounts owed from terminal dues, and Clause 2.1(b) of the Letter of Offer made terminal dues part of the loan security. No fraud, coercion or undue influence was pleaded, so the Court would not rewrite the contract.
Whether the Respondent breached the contract of employment and the loan agreement or discriminated against the Claimant
No breach or discrimination was proved on a balance of probability
The Respondent acted in accordance with the express set-off clause in the HR Manual and the security clause in the Letter of Offer. The undisputed net terminal dues remained available to the Claimant upon signing the clearance form, and the Respondent had prepared a discharge of charge over the Juja property. The Respondent even offered to reinstate the loan at preferential rates with its concomitant security rights.
Legal principles established
#- A court cannot re-write a contract between parties; parties are bound by the terms of their voluntary agreement unless coercion, fraud or undue influence are pleaded and proved.
- An employer's right of set-off under an HR Policy Manual and the listing of terminal dues as loan security may be lawfully exercised against a departing employee's terminal dues.
Court orders
#- 1.The application (Notice of Motion dated 19.8.2019) is dismissed
- 2.The Claimant/Respondent to pay costs of the application
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Employment and Labour Relations Court jurisdiction over employment and loan-rate disputes between employer and former employee (as conceded in submissions on jurisdiction)
Relief refused
#Order allowing the Claimant to remit the mortgage balance of Kshs. 1,610,796.41 at preferential rates pending hearing and determination of the suit
The Applicant failed to prove breach of the HR Policy Manual or loan agreement; the Court cannot re-write the parties' contract
Order releasing the sum of Kshs. 1,032,626.84 of terminal dues to the Claimant
Terminal dues formed part of the loan security and the Claimant refused to sign the clearance form; he is to blame for failing to collect the net sum
Costs
The application stands dismissed with costs to the Respondent.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
it is my holding that the application has no merits and it stands dismissed with costs
One party cannot be allowed to exercise a right which is not provided for under the contract, nor does the court exist to re-write a contract for the parties but to enforce what they have voluntarily bound themselves to.
A Court of law cannot re-write a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved.
Therefore, he is rightfully entitled to repay his facility at the preferential staff terms for the term of the loan.
Issues in the judgment
#The undisputed terminal dues figure appears inconsistently as Kshs. 1,032,626.84 in the pleadings/submissions and as Kshs. 1,032,796.41 in the holding
The mortgage balance is variously stated as Kshs. 1,610,796.41 and Kshs. 1,613,705.14
The claimant's affidavit is dated 19.9.2019 supporting a Notice of Motion said to have been filed on 19.8.2019
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Samuel Gacheha Chege v Kenya Women Microfinance Bank [2021] KEELRC 1803 (KLR)", Case Analysis (2021). Notice of Motion dated 19.8.2019 (interlocutory application within the claim). Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1803/eng@2021-03-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.